Two Wheeler Industry

(100cc - 150cc two wheelers)

Presented by:
Diksha
Aditi
Heena
Palak
Shweta
 Introduction
The Automobile Sector
1942- Hindustan Motors manufactured the first
automobile in India.
The automobile industry in India is world’s fourth
largest, with the country currently being the world's 4th
largest manufacturer of cars and 7th largest
manufacturer of commercial vehicles in 2018
The sector that employs 37 million people (direct and
indirect), contributes 7.5% to the country's GDP .

Source:https://www.symboinsurance.com/blogs/car-insurance/evolution-automobile-
industry-india/
https://www.ibef.org/industry/automobiles-presentation
MAJOR EVENTS

Source: https://www.symboinsurance.com/blogs/car-
insurance/evolution-automobile-industry-india/
Source: https://www.fintapp.com/blog/two-
wheeler-industry-analysis-research-report/
 The Two-Wheeler Industry
Evolution
1955 – 350 cc bullet in Indian Army.
1955-1970 - Royal Enfield 350 cc, Lambretta by Automobile
Products of India (API), Vespa by Bajaj Auto Limited, Yezdi
(250 cc) by Ideal Jewa Pvt. Limited and Rajdoot (175 cc) by
Escorts Ltd.
Luna by Kinetic Engineering, Vijai by Scooters India Ltd.,
Priya by Maharastra Scooters Ltd., Hero Majestic by Majestic
Auto Ltd. and TVS 50 cc by Sundaram Clayton Ltd

Segments
1. Motorcycles
2. Scooters
3. Mopeds
Source: http://www.spareaze.com/two-wheeler-industry-india/
https://www.linkedin.com/pulse/indian-two-wheeler-industry-its-evolution-sameer-malhotra-1
Key Events
Two-wheelers accounted for 81 per
cent of domestic demand in 2018-
19.

India is the second largest

manufacturer and producer of two-
wheelers in the world.

Until 1958, API and Enfield were the

sole producers.

The two-wheeler market was opened

to foreign competition in the mid-80s.

Sources: https://www.ibef.org/industry/automobiles-presentation
http://content.indiainfoline.com/wc/archives/sect/attw/ch02.html
Factors affecting the two-wheeler
industry
• Low penetration level to drive the growth in two-wheeler
industry
• Improvement in discretionary spending and urbanization
to drive premiumization
• Improvement in rural india to drive demand for
motorcycles especially for entry level segment
• Recent correction in commodity prices may help in
improving margins
• Regulatory concerns impacting the industry growth

Source: https://www.hdfcbank.com/assets/pdf/privatebanking/Sector-Update-Auto-
Two-Wheeler-Industry-Jan-2019.pdf
Market Share

Sources: https://auto.economictimes.indiatimes.com/news/two-
wheelers/motorcycles/top-10-two-wheeler-makers-in-fy19-bajaj-reports-
double-digit-market-share/68808620
Statistics

Source: https://www.hdfcbank.com/assets/pdf/privatebanking/Sector-
Update-Auto-Two-Wheeler-Industry-Jan-2019.pdf
Source: https://www.statista.com/statistics/318023/two-wheeler-sales-
in-india/
 Market Structure

Automobile: Commercial vehicle, Passenger

vehicle, 2-Wheeler, 3-Wheeler

2 Wheeler: Motorcycles, Scooters, Mopeds

As the automobile industry is not mainly dominated
by one single firm and in different parts of world
there are different market leaders.

So, in bigger picture the global automobile industry

is having an oligopolistic structure where many
players are there to share profit for competition.
PEST Analysis
 Political
• Indian government auto policy aimed at
promoting an integrated, phase and
conductive growth of the Indian Automobile
industry.
• Allow automatic approval for foreign
investment, with no minimum investment
criteria.
• Assist development of vehicles propelled by
alternate energy sources.
 Economic
• Low cost labour coupled with local availability of raw
material like steel, aluminium and natural rubber has
placed India amongst the low cost producing centers
of two wheelers.
• Many auto finance company laid easy installment
rules with less interest rate it makes more segment
people to go for it.
 Social
• In numerous cultures, motorcycles are the
primary means of transport.
• Two wheelers gives a great advantage to the
specified designation where other cannot
enter.
• Indian customers are highly discerning,
educated and well informed. They are price
sensitive and put a lot of emphasis on value
for money.
 Technological

• Two wheeler construction is the engineering,

manufacturing, and assembly of components
and systems for two wheelers which resultin
performance, cost and aesthetics desired by
the designers.
• Best fuel economy of transport.
• New innovations.
Porter’s 5 Force Analysis
 Threat of Substitutes:
High

Bargaining Power of
Bargaining Power of Competitive
Buyers: High
Suppliers: Low Rivalry:
High

Threat of new
Entrants:
Low
 THREAT OF NEW ENTRANTS
• Entry barriers are high.
• Huge investment
• Capital investment is very huge in two wheelerindustry.
• The biggest challenge is setting up sales & servicecenter,
which is very hard for a newentrant.
• Well established players are already existing.
• Industry is consolidated.

Threat of new entrance is Verylow.

 THREAT OF SUBSTITUTE
• Faces direct competition from the automobilesector.
• Substitute products for twowheeler industries are:
– Bus, Auto, Cars and other public transports.
• Reasons for choosing substitutes may:
– Relative quality of substitutes ishigher.
– Switching costs is lower.

In 150-250cc segment there is less risk of

substitutes.However in lower segment(90-150
cc)penetration could be seen towards non gear scooters.

Threat of substitute is High.

 RIVALRY AMONG COMPETITORS
• Price, Quality of the products plays an important role for
rivalry among competitors.
• Methods adopted to attract customers - Discounts, availability
of loans, low rate of interest and long-term warranties to
attract customers.
• Each company in industry change the model on going basis to
show differentiation in their competitors.
• Having 6 major companies in market ,competition is high
• Compete each other in terms of better model, specifications
and technology

Rivalry among sellers areHigh.

BARGAINING POWER OFSUPPLIERS
• Since they change their model on going basis they create
good relationship between their suppliers.
• Some of the components in twowheeler industry sellers have
bargaining power:
• Steel
• Batteries
• Tyres & Tube etc.
• The automobile supply business is quite fragmented.
• Bargaining power of suppliers is less as quantity supplied is huge
and prices of raw materials has come down. Basic raw material
required are steel and rubber

Bargaining power of suppliers areLow.

 BARGAINING POWER OFBUYERS
• There are 5 to 6 big popular brands of two- wheelers are
available.
• Nowadays people go to unique brands because of good service
they provide after purchase.

• Customers get a healthy choice .

• › Depends on taste and brand loyalty of the customer.

• › Supply-demand mismatch in the industry(supply is greater)

Bargaining power of buyers areHigh.

Thank You